Wednesday, September 2nd, 2009

Question regarding credit card debt and collection practices?

debt credit card
momvader73 asked:


Debt is credit card. Last activity on the account was in late 1999, early 2000.
Collection agency has it now. I need to know how the following things will happen:
1099C tax form?
How it will affect my student loans and Pell Grants?

Any abusive answers WILL be reported.

I need explicit answers and possible links to the information.
OK, but what about the 1099C?

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5 Responses to “Question regarding credit card debt and collection practices?”

tudorjason (matt) Says:
September 3rd, 2009 at 6:36 am

Credit card debt has no bearing on completing a FAFSA and whether you’ll be eligible for grants. I don’t have a link to prove this, but you could contact them to validate this by sending an e-mail on their Contact Us page.

drctrutops Says:
September 6th, 2009 at 3:20 am

Most states have a statute of limitations on credit card debt collection. Check —What-You-Should-Know&id=82122

Slimick Says:
September 8th, 2009 at 12:54 am

Debt this old should permanently be off your credit files….The 7 year reporting cycle cannot be re-started for ANY reason whatsoever.

A lot of debt collectors are trying to collect on ancient debt by any means necessary…including making bogus threats and scaring people by sending 1099C forms. Any forgiveness of debt would have been taken by your ORIGINAL creditor when your account was charged-off. Only your original credit would send you a 1099C. To be safe, consult an accountant or attorney. If you can’t afford one, respond by sending them a certified letter with return receipt, stating the following:

Re: 1099C Form
Any forgiveness of this alleged debt would have been taken by the original creditor when it was charged-off. Please send documentation to confirm that I have entered into an agreement with your firm that involves a settlement/forgiveness of debt. Only upon receipt of such documentation will I fill out the 1099C form.

Additionally, per the Fair Debt Collection Practices Act, I am requesting validation of this alleged debt and that said alleged debt is within the statue of limitations.

DO NOT sign your name on this or any written letter to the collection agency as they might pull off your signature and put it on a forged document. See link below.

Sgt Big Red Says:
September 10th, 2009 at 3:44 am

The typical scenario is you receive an official looking letter that reminds you of a debt that you have failed to pay. It then refers to the creditor’s “right to forgive this debt and submit a Form 1099 to the Internal Revenue Service on all bad debt accounts. The last sentence usually reassures you that the creditor does not intend to take such an action at the time, and then urges you to remit payment to “avoid any additional collection activity.”

According to the FTC website, this letter, because of its implied threat, clearly violates the FDCPA, Section 807(5) “False threats of legal action, Section 807(5) prohibits the “threat to take any action that cannot legally be taken or that is not intended to be taken.

Judging by the dates you mention, no doubt this debt is “time barred” (outside of your states statute of limitations to persue legal action). But you should check your states SOL at this link

If this debt is time barred then they can not do squat in court.
This debt is also too old to be on your credit report. The FCRA limits the time an account in collections can be reported to the following: Derogatory Accounts – 7 years from the date of original delinquency; (but it if one reads the whole statute 7 yrs and 180 days).

Here are some links to help you
Information on time barred debts.

US CODE TITLE 15 CHPT 41 CONSUMER CREDIT PROTECTION

Hope this answers your question
LEGAL DISCLAIMER: The advice contained herein is for informational purposes only. It is not to be construed as Legal Counsel nor Legal Advice.

Pengy Says:
September 11th, 2009 at 12:23 am

Well should be past the statute of limitations so that makes it easy to dispute. They cannot list it on your credit report as only the initial person you owe the debt to. What they can do is call you and possibly take you to court, when they call ask them to prove the debt and then ask them is they realize that the debt is past the SOL. If they take you to court show up above all things and state it is beyond the statute of limitations and it will be dismissed. What they hope for is that you do not show up and give a defense then they win by default and can garnish your wages etc. You will not receive a 1099 at all, and should not affect your school loans or Pell grants. Just be aware of what they might try to do, and be ready to fight them. DO NOT admit to debt, and DO NOT offer payments.

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